Cyprus company with Non EU owner and Cyprus rent income

[Tom1020]

Hi
I'm a Latin America citizen and resident and I'm considering a purchase of an apartment in Cyprus.
According to Cyprus law, there are purchasing and renting out limitations for non EU citizens .
If I form a Cyprus company and use it to purchase the apartment would I have to pay tax on the rent income once I withdraw it from the company to my own account ?
Thanks !!

 

[CyprusLawyer101]

Tom1020 said:
Hi
I'm a Latin America citizen and resident and I'm considering a purchase of an apartment in Cyprus.
According to Cyprus law, there are purchasing and renting out limitations for non EU citizens .
If I form a Cyprus company and use it to purchase the apartment would I have to pay tax on the rent income once I withdraw it from the company to my own account ?
Thanks !!
Click to expand...

The income will be taxable as rental income in the Cyprus co, but once you recieve it from the company as a dividend no tax will be applied on that income by Cyprus .

Last edited: Feb 28, 2023

 

[CyprusBusiness]

Tom1020 said:
Hi
I'm a Latin America citizen and resident and I'm considering a purchase of an apartment in Cyprus.
According to Cyprus law, there are purchasing and renting out limitations for non EU citizens .
If I form a Cyprus company and use it to purchase the apartment would I have to pay tax on the rent income once I withdraw it from the company to my own account ?
Thanks !!
Click to expand...

The rental income is subject to corporation tax at 12.5% rate on Company level. There is no withholding tax on Dividend disbursement. You can elect to inject the funds in the company for the property purchase in the form of a loan to get a tax allowable interest deduction.

You also need to also consider VAT on purchase. With new properties 19% vat is charged on the purchase price. The eligibility to claim back VAT is limited as long term rents are tax exempt. The only option that would allow you to claim back VAT is if you choose to implement short-term rents (airbnb style) or renting the property to businesses (as commercial)